U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
View Poll Results: Should the US get rid of the penny?
Yes 79 65.83%
No 41 34.17%
Voters: 120. You may not vote on this poll

Reply Start New Thread
 
Old 09-09-2018, 07:20 AM
 
17,603 posts, read 12,197,156 times
Reputation: 12816

Advertisements

Quote:
Originally Posted by PacoMartin View Post
While it is true that most of the countries with high GDP have coins with values equivalent to $1 and $2, only Japan and Switzerland have a coin with a value equivalent to $5.

But doesn't it make more sense to replace small transactions involving less than US$20 with cards.


In Nordic countries they use phone apps for person to person transactions (giving your friend money to share expenses). They work with flip phones by sending texts.

Korea intends to keep using it's largest denomination banknote (worth $40-$50 depending on exchange rate) for appropriate transactions or as a way to store value outside of a bank.
Zelle covers that for most Americans. You can add PayPal and Venmo as well
Reply With Quote Quick reply to this message

 
Old 09-09-2018, 08:15 AM
 
9,064 posts, read 9,217,240 times
Reputation: 4665
Quote:
Originally Posted by Lowexpectations View Post
Zelle covers that for most Americans. You can add PayPal and Venmo as well
I understand that we have phone apps, I said that Nordic citizens use phone apps.

In Sweden, Norway, and Denmark over 50% of the citizens use the same app (one per country). There is a huge difference between a small percentage of people using an app, and nearly everyone in the country under the age of 50 having the same app. It makes it much easier to use.

Incidentally reducing cash transactions is not the same thing as reducing cash. Sweden circulates 10.2 small value banknotes per capita while the USA circulates 55.6 small value banknotes. In addition Sweden circulates 21 coins worth about $1 per capita. These small bills function as changemakers since they are usually not worth putting in an ATM

Circulation (per capita)
Sweden : USA : denom
coin : 36.9 : $1 (Sweden has 21 coins per capita in circulation)
5.1 : 3.7 : $2 (USA has virtually all their $2 banknotes stuffed in drawers)
2.0 : 9.0 : $5
3.1 : 6.0 : $10
Only the USA and Canada of developed nations uses twenties in ATMS. Most nations use fifties. Britain also uses the twenty, but it is wroth more than in North America.

Larger value notes are used for private transactions and also to be loaded into ATMs. While Denmark has a similar reduced number of petty cash transactions (like Sweden and Norway), Denmark still retains wide circulation of it's high denomination banknotes. In that sense they are more like Germans, as they want large notes to keep in a safe under their bed, or for private transactions.

Swedes have developed a historic amount of trust in both their government and in their banks. As many people have pointed out, if there is no cash it makes it very easy to invent a bunch of "fees and surcharges" which can automatically be collected. For instance instead of collecting tolls on bridges and certain high speed tollways, you could simply GPS every car and charge people a mileage tax (with higher rates for urban centers) and take the money directly from their accounts. You could prevent the sale of candy to fat people until they lose weight. The possibilities open to a government that can see directly into every transaction done by their citizens are endless. If you are an enemy of the state you would have to steal everything, including snacks, or else the police could track you by your transactions.



Currency reform is either aimed at reducing petty cash transactions to make business more efficient, or it is aimed at reducing large denomination notes to improve tax collection, and cut back on crime, tax evasion and making it harder on illegal immigrants.

Last edited by PacoMartin; 09-09-2018 at 08:41 AM..
Reply With Quote Quick reply to this message
 
Old 09-09-2018, 08:18 AM
 
Location: USA
13,228 posts, read 7,277,975 times
Reputation: 9572
"Change" should be abolished. We have inflated our way out of the value of coins. Make them for collectors only, and sell them at a profit.
Reply With Quote Quick reply to this message
 
Old 09-10-2018, 10:36 AM
 
Location: Gilbert, AZ
3,003 posts, read 1,694,053 times
Reputation: 2945
Quote:
Originally Posted by PacoMartin View Post
Even if we just go back to 1983 when Copper-plated Zinc replaced bronze as a cheaper production material, there should be a thousand pennies for every man woman and child in the USA. If they were just circulating we shouldn't have to produce a penny for decades.

Yup, they have so little value that most people won't carry them. All of those pennies sitting it jars, or pails in people's homes, or just get thrown away and end up in landfills.
Reply With Quote Quick reply to this message
 
Old 09-10-2018, 10:45 AM
 
8,711 posts, read 8,906,804 times
Reputation: 12181
The US abandoned the 1/2 cent coin back when it's actual value was around what a dime is worth today. So by that standard, the 1cent and 5cent coin should go on the chopping block.

In the early 1900's. you could get by with pocket change. A cup of coffee that is $2 today, was 10 cents back in 1940. A couple of quarters and you could get by for the day. These days, pocket change is what's left over after a few transactions during your day that just get dumped in the cup holder of your car and cashed in every few months ago. Most people use bills for their daily interactions now. $1's, $5's and $10's for small purchases. Paper bills don't last. Coins do. You probably see quarters from 65-69 in your change all the time. Just the other day I got a penny from 1919 (I kept it) so coins do generally last a hell of a lot longer than paper bills...the problem is you can't buy anything with it because of inflation.

Might be time for the US to evaluate how it divides up it's currency as well. A coin lasts 30 years in circulation, a dollar bill lasts 2 years...barely. I know the US has tried to push it's $1 coin without success, but it might be time to ditch the $1 bill as well. perhaps the coin breakdown needs to be 0.25, 0.50, $1, $2 and a $5 coin. Paper bills can then start at $5 and go up as normal. Would be nice to see a $500 bill return.
Reply With Quote Quick reply to this message
 
Old 09-10-2018, 10:48 AM
 
Location: Lower East Side, NYC
1,837 posts, read 1,084,455 times
Reputation: 1290
Modernize every system to be capable of doing contactless transactions, and it'll be possible, but good luck in the bureaucratic mess that is the US. I have to pay cast for my laundry, many restaurants, and definitely food carts. Generally, if it's cheap ($2 peanut butter noodles!!), it costs cash. Even in Japan, I've had to use my coins more than my plastic (not an issue of not being able to pay, anywhere that took plastic took Visa or contactless Passmo/Suica).

To note: I hate pennies and 1 yen coins. Pennies are virtually useless, and 1 yen coins, while useful in a society that doesn't tip (exact change is nice because you don't need to wait for the guy to come back with cash), I still find I have around 100 of them in my wallet. Terrible.
Reply With Quote Quick reply to this message
 
Old 09-10-2018, 10:52 AM
 
8,711 posts, read 8,906,804 times
Reputation: 12181
Quote:
Originally Posted by hikernut View Post
Yup, they have so little value that most people won't carry them. All of those pennies sitting it jars, or pails in people's homes, or just get thrown away and end up in landfills.
Or, as the metal detecting hobby has shown....they just fall to the ground and people don't bother to pick them up or lose them in general. You can't swing a detector without finding coins in the ground.

When I worked on a road construction crew, the left lane median was ripe full of coins that people chuck out car windows and nobody can pick up. Some people just don't have a use for 35 cents in change, and chuck it out the window. Used to just bend down, pick up $5 in quarters and that was a coffee or snack at the end of the day.

I personally save all my change and toss it into a jar. At the end of the year, I cash it in and it's usually $200-300 or so. I go buy myself something nice. If you want to chuck it out your car window..send it my way instead
Reply With Quote Quick reply to this message
 
Old 09-12-2018, 03:31 AM
 
Location: Sector 001
7,128 posts, read 5,942,160 times
Reputation: 8042
They should have gotten rid of them 20 years ago. At this point they could get rid of nickels, too, and just round to the nearest quarter, then get rid of dollar bills and just have 25 cent coins and dollar coins. I suppose they figure contactless transactions are close enough it's not worth the bother. Still, it's annoying they can waste time worrying about who's on the 20 dollar bill but not actually do something useful to fix our outdated coinage.

If I was in charge we'd have quarters, dollar coins, and 5 dollar coins, with no dollar bills or 5 dollar bills.. the lowest denomination bill would be a 20, followed by 50 and 100. No need for 10's, and no need to abolish 100's. Since we have all these dollar coins laying around already that transition would be easy.
Reply With Quote Quick reply to this message
 
Old 09-12-2018, 04:33 PM
 
Location: Myrtle Creek, Oregon
11,039 posts, read 11,450,778 times
Reputation: 17182
Quote:
Originally Posted by jackmccullough View Post
Nothing "typical government" about it. It's a simple matter of the value of the materials and the value of one cent.

It's called negative seignorage. The negative seignorage is even greater for the five-cent piece.
That used to be the case when pennies were made from copper, but now they are zinc with a copper wash. The nickel is still worth more as metal than the face value of the coin. It was once common to melt down coins for silver smithing. I have about 70 lbs. of coin silver in storage that was sold for plate prices because it didn't have a sterling mark on it. A handle was broken off a heavy serving tray, so I could see it was solid silver, not base metal. I bought all they had. Score.
Reply With Quote Quick reply to this message
 
Old 09-12-2018, 04:54 PM
 
Location: Myrtle Creek, Oregon
11,039 posts, read 11,450,778 times
Reputation: 17182
Quote:
Originally Posted by stockwiz View Post
They should have gotten rid of them 20 years ago. At this point they could get rid of nickels, too, and just round to the nearest quarter, then get rid of dollar bills and just have 25 cent coins and dollar coins. I suppose they figure contactless transactions are close enough it's not worth the bother. Still, it's annoying they can waste time worrying about who's on the 20 dollar bill but not actually do something useful to fix our outdated coinage.

If I was in charge we'd have quarters, dollar coins, and 5 dollar coins, with no dollar bills or 5 dollar bills.. the lowest denomination bill would be a 20, followed by 50 and 100. No need for 10's, and no need to abolish 100's. Since we have all these dollar coins laying around already that transition would be easy.
The dollar has lost 90% of its value, so a dime is worth about what a penny was worth 100 years ago. A dime would be a good smallest coin. I would go dime-50 cent-dollar coins. Like most people, I carry mostly $50 bills, since a decent amount of $20 bills make too big a wad. A $50 bill is about what a $5 gold piece was worth a century ago.

The big problem with US money is that it has gone far too long without being revalued, so the denominations are cumbersome.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top